14 Sep What is your Investment Worldview?
Seth Godin is an American entrepreuneur and author. His best selling books include ‘Tribes’, Linchpin’, ‘Purple Cow’ and All Marketeers are Liars’. Godin is a marketing guru and his insights on creating products, building a brand and communicating with customers are legendary. He is a maverick, but it is the ability to communicate his ideas in an easy to understand manner that wins him the biggest fans.
In his 2005 bestseller All Marketeers are Liars, Godin starts off the very first chapter by questioning the common assumption of human beings all wanting the same thing.
We all want to be safe, successful, healthy, loved, respected, happy and fit. We all want enough money to buy whatever we want. We all want friends and fun and a clean world to enjoy them in.
But if we all want the same thing why do we take so many opposite tacks to get there? Why Doesn’t everyone drive a Honda or run their factory using the same techniques? Why don’t we all practice the same religion or wear the same clothes? Why is the average price paid for a wedding dress 799 with some women paying ten twenty times the price and others borrowing it for free?
The real reason he claims, is that human beings actually do not want the same things (even though it seems very much like it). We all have different ‘Worldviews’; we carry with us different sets of biases, assumptions, values and beliefs.
We interact with the world based on our Worldview. We allocate attention to messages that fit our worldview, filtering out those that do not. The worldview we posess translates to the choices we make. The worldview we hold determines what we want.
For example, if someone was ripped off by a dishonest car mechanic previously, the worldview he carries with him will be very different from another who is on good terms with his regular and trusted fixer. He now places a huge emphasis on his car being trouble free, preferring to buy a new car that comes with a warranty period and easy maintenance. His worldview dictates his choice.
Godin went on to list some common worldviews people have. How many of them do you agree with?
New technology can improve my life
I afford the best
If I am better looking, I would be more popular
All car salesmen are liars
Protecting my family from harm is the most important thing I can do
There is no right or wrong when it comes to these statements. They are equally believed or rejected by different individuals. Yet, if we put them (and all the other thousands of possible worldviews) all together we would be getting a composite picture of what someone is like and how individuals can really differ.
What do investors really want?
At the very first glance, investors are all alike. We are driven by one common aim – Money. But is that really the case?
Some investors want to grow their capital slowly and steadily. Others are more anxious and are willing to go for higher returns (and higher risks).
Some investors want to learn how to invest properly. To them, investing is a game they want to win. Others don’t care about the means, they just want the end result of good returns.
Some investors believe in diversification. Others will only invest in the things they are familar with.
Some investors believe investing for cash flow through dividend yields and coupon payouts. Others can sit through long periods without any gains.
While Godin intended for marketeers to use the concept of worldviews to reach out to their prospects, this concept is throughly applicable to investing. We all have our biases, values, beliefs and assumptions which we bring to the investing table.
Have a look at the following list. How many of them describe you as an investor?
I prefer to buy blue chips because they are less risky than penny stocks.
I enjoy being debt free, I try to pay off all debt ASAP.
Cash is King. Cash allows me to grab opportunities when they arise.
Investing in a good property is a sure win in the long run.
The way to be rich is to listen to what the rich say and invest like they do.
Stability and security is very important to me.
Investing is too difficult. I am not smart enough to learn how to do it.
Rich people are rich because they exploit others. I would rather live a simple and contented life than be evil.
These statements, and many many more make up your investing worldview. They comprises of your values, beliefs, biases and assumptions. There is no right or wrong worldview, just like there is no right or wrong religion.
The worldview you hold will determine what you choose to invest in and what type of investor you are. Leave a comment below and share your worldview with us!